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Federal Marketplace Subsidies at Stake in King v. Burwell

Posted by Anulkah Thomas, Health Coverage Policy Analyst on March 12th, 2015
Photo credit flickr user DIBP images (CC BY 2.0)

Oral arguments for the Supreme Court case of King v. Burwell commenced on March 4, 2015.  The suit centers on a section of the Affordable Care Act (ACA) stipulating that people who purchase marketplace plans through exchanges “established by the state” are eligible for subsidies which reduce the cost of their insurance premiums and make them more affordable. The plaintiffs assert that only state-based marketplaces like Covered California can offer subsidies, meaning that the federal government is in violation of its own law by providing subsidies through the federal marketplace, healthcare.gov.  Currently, more than seven million people in 36 states receive financial assistance through the federal marketplace.

The Obama administration’s defense focuses on the overall language of the law as well as its intent, which they argue was to make health coverage affordable for all Americans subject to the individual mandate. Those familiar with the three-legged stool metaphor concerning the ACA understand just how important premium assistance is to the sustainability of healthcare reform.  According to the architects of the ACA, the law’s success is dependent upon

  1. disallowing health plans to deny coverage to persons with pre-existing conditions,
  2. an individual mandate requiring most Americans have health coverage regardless of their health status so that the market is not primarily composed of enrollees with high-cost medical needs, and
  3. the provision of financial assistance to make complying with the individual mandate financially feasible and increase the likelihood healthy persons will enroll in coverage.

Community Health Councils expects that the integrity of the ACA will remain intact once the Supreme Court considers both the intent and the overall language of the law over conclusions based on “four little words.” The Supreme Court is expected to arrive at a decision by the end of June. For more information, please contact Community Health Councils’ Policy Analyst Anulkah Thomas at anulkah@chc-inc.org.

Posted in 2015